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CALGARY, Alberta, Dec. 1, 2012 /CNW/ - Direct Energy Regulated Services (DERS) has announced default electric rates for December 2012. The Regulated Rate Option (RRO) sets the rate per kilowatt hour that regulated customers pay for electric energy in the ATCO Electric service territory. The rates are adjusted each month to reflect the price that DERS pays to buy energy on behalf of customers. The method DERS uses to set the RRO rates have been verified and approved by the Alberta Utilities Commission.

Depending on the rate class, the energy rate for December is approximately 15% higher than the energy rate charged last month, except the lighting rate class which is 16% higher. A typical residential customer consuming 600 kWh per month would see approximately a $7 or a 5% increase in the total amount of their bill compared to last month.

Rate Class

December Rate (cents/kWh)

Residential

8.632

Commercial

8.464

Industrial

8.220

Farm (Includes REA)

8.457

Irrigation

8.457

Oil & Gas

8.150

Lighting

7.020

Further information on regulated rate option and a complete list of competitive retailers can be found on the Alberta government's customer choice website at: www.ucahelps.gov.ab.ca.

Backgrounder

How will a typical bill this month compare to previous months based on 600 kWh's per month?

December 2012, a typical residential bill will be $150

December 2011, a typical residential bill was $177

November 2012, a typical residential bill was $143

When was the last month that a typical residential rate was this high?In March 2012, the residential rate was $0.08508/kWh. A typical residential bill for March 2012, based on 600 kWh's was $158.

How is the RRO transition rate determined?DERS does not own any electricity generating capacity. Therefore, under a Price Setting Plan approved by the AUC, DERS purchases blocks of electricity for the upcoming month for its customers. Representatives of consumer groups, as well as an independent advisor, participate in purchase decisions with DERS. The rates to consumers represent a blended price of the electricity purchased, and include costs related to DERS' procurement activities and compensation for the consumer groups' and advisor's participation. The rates are filed with the AUC for acknowledgement, as are details supporting their derivation.

What is the Energy Price Setting Plan?DERS negotiated with consumer groups in arriving at the Energy Price Setting Plan. These negotiations were conducted under the Commission's Negotiated Settlement Rules, and all meetings were attended by a Commission observer. Upon completion of negotiations, DERS filed the Settlement Agreement, including the Energy Price Setting Plan, with the Commission, and received approval on May 5th, 2011. The Energy Price Setting Plan sets out the details of how DERS is to acquire electricity for consumers, what costs are included, and how the RRO transition rate is to be calculated. The Energy Price Setting Plan also specifies the involvement of consumer groups throughout the process.

Why do Electricity prices fluctuate?Electricity prices are set in an open and competitive market, and are influenced by many variables including and not limited to supply and demand, natural gas prices, weather, pricing and availability of competing energy sources, availability of imports and exports into the province, and market analyst's views of future trends in any of these variables.